Uhuru, Treasury line up Ksh.54 billion economic rescue package
- The contingency plan is expected to further cushion the economy from the depressive effects of the Covid-19 pandemic which has caused widespread output disruptions.
- Nearly half of new funds or an equivalent Ksh.13.5 billion will be directed towards boosting the liquidity of businesses including Ksh.10 billion for the hastening of VAT refunds to businesses and payment of pending bills below Ksh.3 million.
- The stimulus package is expected to be funded through a combination of additional funding from development partners, budget realignments and surplus mop ups from parastatals.
President Uhuru Kenyatta has given Treasury the green light to resubmit its ministerial budget appropriations to include a Ksh.53.7 billion economic rescue package.
The contingency plan is expected to further cushion the economy from the depressive effects of the Covid-19 pandemic which has caused widespread output disruptions.
In a letter to the clerk of the National Assembly Michael Sialai, the National Treasury outlines the plan dubbed the Post Covid-19 Economic Stimulus Package (PC-ESP) which pumps in a further Ksh.32.4 billion into eight thematic areas taking total funding to Ksh.53.7 billion.
Nearly half of new funds or an equivalent Ksh.13.5 billion will be directed towards boosting the liquidity of businesses including Ksh.10 billion for the hastening of VAT refunds to businesses and payment of pending bills below Ksh.3 million.
A balance of Ksh.3 billion is to serve as seed capital for the expected Credit Guarantee Scheme to small and medium enterprises (SMEs) while Ksh.513 million is set to purchase 400 vehicles from local assemblies by Ministerial and State Departments (MDAs)
The tourism sector is meanwhile set to receive a Ksh.5.9 billion windfall from the economic rescue package with Ksh.3 billion allocated as soft loans for hotel renovations via the Tourism Finance Corporation.
A combined Ksh.2 billion is to be channelled as grants to 160 community conservancies and the engagement 5,500 community scouts for an year by the Kenya Wildlife Service (KWS).
Moreover, Ksh.874 million is earmarked as a marketing fund to the Kenya Tourism Fund (KTB).
Other thematic areas covered in the stimulus include Ksh.5.3 billion to agriculture which includes Ksh.1.5 billion in support to local cut flower producers and Ksh.470 million as working capital for the Kenya Meat Commission. (KMC).
Further, Ksh.4.2 billion is scheduled for the expansion of the Kazi Mtaani Programmes in all major towns in the country while Ksh.3.1 billion is set to improve education outcomes including the hiring of 10,000 teachers on contract.
Road rehabilitation works are set to receive a further Ksh.410 million while water and sanitation programmes are to receive a Ksh.900 million injection of new funding.
The stimulus package is expected to be funded through a combination of additional funding from development partners, budget realignments and surplus mop ups from parastatals.
MDAs are expected to shed Ksh.8.3 billion from their initial funding while the state is expected to mop up Ksh.12.3 billion in parastatal surpluses.
A further Ksh.17.2 billion is expected to be sourced from the EU and Denmark’s budget support programmes and the sports and road annuity funds.
The revised submissions are further expected to shake up appropriations to the executive with State departments such as infrastructure, transport, ICT and Energy marking a reduction in funding.
The Nairobi Metropolitan Services (NMS) under the Presidency is set to receive a total of Ksh.27.9 billion, budgets to the Presidency and Interior Ministry are expected to be enhanced by Ksh.3.9 billion while Ksh.4.6 billion has been channelled to the leasing of motor vehicles from the State department of Interior to the National Treasury.
The National Treasury Climate Action Project is set to receive Ksh.100 million in external financing.
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